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Transcript of SRI LANKA SUSTAINABLE ENERGY AUTHORITY Sri Lanka Sustainable Energy Authority Resource Allocation...
SRI LANKA SUSTAINABLE ENERGY AUTHORITYSri Lanka Sustainable Energy Authority
Resource Allocation for On-grid Renewable Energy Project Development : an Introduction
Harsha Wickramasinghe
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Content
Background
Applying for Provisional Approval
Reapplications made for cancelled sites
Pre-feasibility study and Consultants
Granting and refusing Provisional Approvals
Granting and refusing Energy Permits
Effects of delays accrued
Power purchase agreements and tariffs
Cancelled Provisional Approvals and Energy Permits
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Background
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
• On-grid Renewable Energy Projects Regulation 2009 published in Gazette No. 1599/6 of 27th April 2009 is to be amended (not repealed as contemplated earlier)– A new regulation with new schedules was gazetted on 31 May
2011 (Gazette No.1705/22 of 10th May 2011)– Effective date 10May, 2011
• Halfway done projects, letters sent requesting balance payment– New regulation requires the formulation of new guidelines
• Guidelines were formulated by SEA in association with PAC to;– Advise the Board of Management of SEA on technical, economic
and environmental guidelines on granting Provisional Approval (PA) and Energy Permits (EP)
– Review and recommend changes in policies, plans and strategies in developing renewable energy
• Need to overcome stalemate arising out of the prevalent regulation– Many sites in abeyance with cancelled PAs
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Background
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Applying for PA
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
• Any person can apply to develop a new renewable energy (NRE) site, provided that the application is accompanied by ;– A report on Pre-feasibility study carried out by a Consultant
accredited by SEA, which include;• A brief description of the project, including the amount of power to
be generated• The total estimated cost and financial model• Project location, describing the relative location of energy conversion
plant and equipment to the resource• A sketch indicating the method of interconnecting the project to an
existing point in the national grid– A copy of the map of the geographical location of the proposed
project,– Proof of availability of adequate finances or the manner in which
the required finances for the project are to be obtained,– A copy of the receipt obtained from the SEA, for the payment of
the prescribed application fee
Full functionality
of
Section 16 enabled as
requested
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Applying for PA
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
• With the previous regulation, a resource verification process was available, and this will be taken out in the new regulation– A possible contravention of the Act avoided– A burden to the developer
• All applications to be tabled before the PAC– Applications favourable considered for PA, if;
• the resource site is available for development, • not associated with a another applicant who is;
– waiting for / carrying a Provisional Approval, – is waiting for / carrying an Energy Permit
• the Government is having plans for development of the resource site • the resource site is already being utilised by any other party for on-
grid or off-grid electricity generation
– Refusal of PA, if the above conditions are not satisfied
• Queues maintained for a given site to be cleared– By tabling all such applications before the PAC
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Applying for PA
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
Amount of power proposed to be generated
Fee to be paid on application and reapplication
1,000 kW or part thereof LKR 100,000
Each additional 1,000 kWLKR 50,000 payable
on pro rata basis
Note: Projects of capacities less than 10,000 kW implemented by a single party or parties acting in concert, in parallel or in phases in a same geographical or spatial context will be considered as a single project capable of generating more than 10,000 kW of power and will not be considered unless a policy directive from the Ministry of Power & Energy is issued on that behalf
• Application fee structure amended– Presently LKR2,500 resource verification fee and LKR10,000
application fee– Revised to reflect the process involved and also to become
a deterrent, limited only to cash / bank drafts ?
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Reapplications
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
• With the previous regulation, a stalemate condition occurred due to a statement assuring that the same applicant has not made any previous applications for the same site– This statement replaced by the following statement ;‘I attach herewith technical and other details related to the resource site, as requested by
the Director General.’
– This is to elicit the progress achieved by the Applicant with the PA granted to that site prior to the cancellation
• Extensions to PA and reapplications will have to be supported with a progress report and a presentation– No Extension fee will be charged– This will form the basis for DG’s recommendation to PAC– The success will be based on a comprehensive marking
scheme
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
PassProject Aspect Investigated Marks MarkHow far the Developer has proceeded 23 10/23Provisional Approval status : Extension requested 2 Extension for Provisional Approval obtained 3 Letter of Intent from CEB obtained 5 Divisional Secretary’s no objection obtained 2 Local Authority approval realised 2 National Water Supply & Drainage Board approval obtained 2 Department of Agrarian Services approval obtained 1 Department of Irrigation / Coast Conservation approval obtained 2 Forest Department approval obtained 2 Department of Wild Life Conservation approval obtained 2 Environmental Clearance 10 Registration 5 Terms of Reference obtained 3 Environmental approval issued 2 Level of effort of Developer 50 20/50Initial survey carried out 5 Pre-feasibility study report available 2 Detailed survey plans available 8 Full feasibility study report available 9 Layout confirmed after site inspection 2 Full weather cycle resource assessment report available 8 IEE or IEA report submitted to approving authority 5 Land acquisition / vesting completed 8 Land ownership identified / tenement list submitted to SEA 3 How optimally the resource has been harnessed 3 Installed capacity accurately calculated 1 Energy yield accurately estimated 2 Financial and technical capability 14 Equity support documents provided 5 Bank references provided 3 Audited accounts / sound bank statements provided 3 Volume of transactions of partners declared 3
Total 100 30/100
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Results of the Evaluation
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
Marks % No of Projects MW
>50 34 62.9
40-50 24 31.4
30-40 24 34.4
20-30 25 90.8
10-20 27 66.6
10> 87 187
Total 221 473.1
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Pre-feasibility and Consultants
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
• Pre-feasibility studies will be done by a panel of accredited Consultants– Will involve 7 genres of technology
• Small Hydro• Wind• Biomass(Dendro)• Biomass (Agricultural and Industrial Waste)• Municipal Solid Waste• Waste Heat Recovery• Other: Any other NRE resource which can be converted to produce
electricity which can be fed to the national grid.
Authority unable to peruse reports on ‘Other’ genre, to be referred to PUCSL?
• Panel of Consultants to be reconstituted, to be limited to Chartered Engineers (Civil, Electrical and Mechanical only?)• Retaining experienced good Consultants ?
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Granting PA
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
• A Provisional Approval will be granted by PAC, based on the DG’s recommendation
• DG’s recommendation will consider whether;– the application is complete in every sense, as per requirements of the Section
16(2) of the Act and On-grid Renewable Energy Projects Regulation 2011, – the amount of power proposed to be produced by the Applicant is
representative of the available resource,– the CEB has granted its concurrence to consider the proposed capacity or part
thereof for grid connection as required under Section 17(1) of the Act,– there is any operational power plant in the same location or using the same
resource area or part of the resource area required by the Applicant for the proposed project,
– SEA has issued a Provisional Approval or an Energy Permit to another Applicant for the same site or the resource or part of the resource area required by the Applicant for the proposed project,
– SEA or the Government of Sri Lanka has plans of their own to develop the site through a different mechanism,
– a policy directive from the Ministry of Power and Energy is available to consider a project with an installed capacity greater than 10MW, in the event of an application is received for a project of capacity greater than 10MW,
– Whether the project is impacting on any excluded area.
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Granting PA
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
• A three phase approach is proposed
Collection of Pre-Approval Papers
Pre-Approval
Formats
Preparation for PAC submission
Distribution at nth PAC Meeting
Forest Wild Life
Irrigation
Archaeology
Relevant? Delist from PA No
Yes
Request Developers to obtain Project Scrutiny & Provide Copies
PRE
APP
ROVA
L CY
CLE
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Granting PA
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
• Silence is consent approach?– PAC rejected this approach
• For relevance check• For scrutiny
Request Developers to obtain Project Scrutiny & Provide Copies
Link Agency Scrutiny Provide Copies of Requesting Scrutiny at (n+1)th PAC Meeting
Follow up by PAC Members Grant / Reject Provisional Approval at (n+2)th PAC Meeting
Link Agency Approval Processes Follow up by PAC Members
CLO
SE S
CRU
TIN
Y CY
CLE
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Granting EP
Reapplications
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
• One time permit fees revised;– Less than 10MW projects : from LKR50,000 per project to
LKR500,000 per MW– More than 10MW project : from LKR1,000,000 per project
to LKR1,000,000 per MW
Follow up by PAC Members Link Agency Approvals
Reject Energy Permit
Grant Energy Permit at (n+r)th PAC Meeting
Follow up by PAC Members
Link Agency Approval Processes Follow up by PAC Members
APP
ROVA
L CY
CLE
Granting PA
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Effects of Delays Accrued
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
• Delays in securing all approvals required for EP could result in cancellation of PA– Remedy offered through the reapplication process– Aggrieved parties may appeal to the Board of Management
• Delays in project implementation after securing EP– Remedy offered through a show cause process– All accrued delays to eat into the 20 year power purchase
agreement from the front end– Aggrieved parties may appeal to the Board of Management
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Power Purchase and Tariffs
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
PPA and Tariffs
Cancelled PA and EP
• For projects up to 10 MW: CEB offer a Standardised Power Purchase Agreement (SPPA) for renewable energy projects of the approved genres, with an installed capacity up to 10 MW.
– The SPPA is standardised and non-negotiable, and is valid for twenty years from the commercial operation date and tariffs will be paid under the Small Power Purchase Tariff (SPPT).
• For projects larger than 10 MW: There is no standardised agreement or standardised tariffs for the sale of electricity from renewable energy projects exceeding 10 MW. Such agreements to be negotiated between the Developer and the CEB, subject to policy directives issued from the Ministry of Power and Energy.
• Small Power Purchase Tariff: The tariff for projects that would enter into an SPPA is published at any given time, typically at the end of each calendar year. There will be a tariff review process conducted by the Ministry of Power and Energy typically once a year
Effects of Delays
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Cancelled PA and EP
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
• Due to incapability of developers or impossibility of implementation, certain sites may face the cancellation of registration– All sites can enter the auction process– Or, only with sites reapplied for ??
• An auction process is designed to assign such projects to new Applicants– Evaluate resource sites and permanently delist
undevelopable resource sites– Prepare project briefs– Register bidders during two cycles (December and June)– Acquire all approvals and lands required for
implementation– A sizable bid bond, representative of the ‘ready to invest’
value of the business case
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
Cancelled PA and EP
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
• Evaluation of Bids on QCBS method– Price meaning the NPV of revenue paid to the Authority as
royalty, during the life of the projectAspect Investigated Marks
Quality of bid 20
Quality of proposal 3
Implementation timeline 5
Qualifications of key people 2
Local value addition ratio 10
How optimally the resource has been harnessed 10
Installed capacity accurately calculated 5
Energy yield accurately estimated 5
Financial strength 15
Equity support documents 5
Bank references 3
Strong audited accounts 5
Volume of transactions of partners 2
Past experience 15
In similar projects (documented) 10
In project management (documented) 5
Financial consideration 40
NPV of revenue stream 40
Total 100
Table 3 : Marking Scheme (Auction Process)Note: Information provided by applicants is subject to validation by directly contacting reference sources provided by the applicant.
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
In Summary
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
Application
Identify siteMark on mapPre-feasibility study and reportProof of financial strengthGrid connection pointApplication fee
Omissions ?
Registration R 1 xxxx x Number
Consult CEBSite inspectionPresentation to Expert Committee
Relevant to line agencies? Delist
from PA
Scrutiny by line agencies
PAC Meeting
Provisional Approval
PA 2 xxxx x Number
Token Number
Proceed to Grant Energy
Permit
EP 3 xxxx x Number
Rejection
Approval by line agencies
Proceed to Grant Energy Permit EP 3 xxxx x Number
Reapplication
Feasibility StudyAccess to Land ResourcesProgress of Statutory ApprovalsEnvironmental Approval
Auction Process
Site inspectionPresentation to Expert Committee
PAC Meeting
Provisional Approval PA 2 xxxx x Number
Token Number
Evaluation
SRI LANKA SUSTAINABLE ENERGY AUTHORITY
In Summary
Reapplications
Granting PA
Background
Applying for PA
Prefeasibility & Consultants
Granting EP
Effects of Delays
PPA and Tariffs
Cancelled PA and EP
Registration of biddersJun / Dec every year
Project Proofing
Project Brief
Return Bid Bonds to Unsuccessful Bidders
Invitation of Bids
Deregister Resource Site
Cancelled Resource Sites
Land AcquisitionStatutory ApprovalsGrid Connection Proposal
Receipt of Bids / Bonds
Bid Evaluation
Auction Cycle Jan/Jul every year
Award of Resource Sites
Proceed to Grant Energy Permit
EP 3 xxxx x Number
Thank You! Call us on: +94-11-267-7445E-mail us to: [email protected] us at: www.energy.gov.lk Drop in at: 3G 17, BMICH, Bauddhaloka Mawatha
Colombo 00700, Sri Lanka